EU HRC market activity sluggish due to healthy inventories

European hot-rolled coil market activity was sluggish Feb. 6 because of healthy inventories, which prompted buyers to limit purchases due to near-term price uncertainty.

“There is hesitation among buyers to restock and they stick to back-to-back trade of smaller lots,” a mill source said. “Restocking that started in January quickly faded.”

Deals were heard at Eur720/mt ex-works Ruhr, which was deemed unrepeatable by the market. Tradable values were reported in the Eur720-780/mt ex-works Ruhr range, with most tradable value indications heard in the Eur740-760/mt ex-works Ruhr range. Offers were reported at Eur720/mt ex-works Benelux from a reroller.

Platts assessed the price of domestic HRC in Northwest Europe stable on the day at Eur750/mt ex-works Ruhr on Feb. 6.

Some market participants were concerned about the price trend’s sustainability due to lackluster demand. However, mills remained firm with offers owing to healthy order books and a lack of interest in imports.

“Import prices are moving up due to rising freight costs caused by need to divert the ships around Africa instead of going though Suez Chanel,” a Germany-based trader said.

Asian mills offered HRC in the Eur660-680/mt CIF Antwerp range for end-second quarter arrival and third-quarter delivery cargoes. The offers did not fetch any bids as buyers were unsure of safeguard quotas for the second quarter and whether they could extend to the third quarter. Offers at the lower end of the range were heard for material from Vietnam with delivery in the third quarter, resulting in too lengthy lead times to attract buying interest.

Platts assessed the price of imported HRC in Northwest Europe up Eur10/mt on the day at Eur670/mt CIF Antwerp on Feb. 6.

Author Rituparna Nathrituparna.nath@spglobal.comMaria